Amazon Embraces Digital Distribution

Amazon.com, which has been moving rapidly into the world of e-books and other
downloadable products, now has created a business group focused on global
digital distribution.

Amazon said its Worldwide Digital Group was created to “centralize its
digital platform and aggressively scale it across product lines and
geographies.”

Jeff Blackburn, who was instrumental in building a team within the company to
maximize sales of digital products online, will head the group.

At the same time, Seattle-based Amazon said it is making the
brand new AtRandom.com Books, a new
imprint devoted to publishing original electronic books, available
in Microsoft Reader format in Amazon’s own e-Books store.

Clearly the more products Amazon can sell via downloads, the fewer real-world
delivery headaches the company will have. However, analysts are divided on
how soon e-books will really catch on.

A recent survey of Internet users showed that despite favorable perceptions,
the demand for e-books remains relatively low. Only one-in-five users
responding to an Arthur Andersen survey said that they were likely to set
down their paperbacks and purchase an e-book in the next six months. And a
recent research report from Jupiter/Media Metrix on the e-book phenomenon was
actually headlined “Limited Scope of E-book Opportunity Comes Into Focus.”

Blackburn is optimistic, however.

“We’ve always planned to develop an aggressive digital offering when the
experience was truly valuable for customers,” he said in a statement
accompanying the official announcement. “Even though this channel is still in
its very early stages, major publishers and record labels have the right
teams and plans in place to drive rapid progress…we expect tremendous
upside for all stakeholders as the format matures.”

Amazon has been pushing boldly into digital territory, launching its e-book
store last November. It first tested e-books in March 2000 when it worked
with Simon & Schuster to offer customers free downloads of Stephen King’s
“Riding the Bullet.”

Last week Amazon.com launched a new free Music Downloads Community,
designed to help fans discover the music of major-label and independent
artists through thousands of free MP3 and Liquid Audio downloads, artist
uploads and a “virtual tip jar” for voluntary artist payments.

Last June, Amazon.com and Audible Inc. partnered, allowing
customers to purchase and download from Amazon more than 22,000 hours of
digital audio content, including audiobooks.